Pocket Option - Why TCB stock dropped sharply
The phenomenon of TCB (Techcombank) stock dropping more than 33% since the beginning of 2024 is causing thousands of Vietnamese investors to worry. This article provides a detailed analysis of the 5 main causes, weekly market developments, and offers proven adaptation strategies to help investors make informed decisions amid this volatility.
TCB Stock Decline Dynamics and Market Context
In Q3/2024, many investors are asking "why TCB stock dropped sharply" when witnessing this bank's stock fall from 48,000 to 32,000 VND in just 9 months. Techcombank - once the highest valued bank in the market with a market capitalization of over 160,000 billion VND - has lost its position and fallen to the group of banks with average market capitalization.
| Date | TCB Stock Price (VND) | % Change | Trading Volume | Vs. VN-Index |
|---|---|---|---|---|
| 02/01/2024 | 48,150 | - | 3.2 million shares | - |
| 31/03/2024 | 42,350 | -12.0% | 4.3 million shares | Underperformed by 7.2% |
| 30/06/2024 | 36,700 | -13.3% | 6.5 million shares | Underperformed by 9.1% |
| 30/09/2024 | 32,100 | -12.5% | 8.8 million shares | Underperformed by 11.3% |
Looking at the table above, TCB stock has lost 1/3 of its value in just 9 months, especially during the period from July to September with continuous decline for over 3 consecutive weeks. While the VN-Index decreased by only about 10% during the same period, TCB dropped 3 times more than the general index, causing many Pocket Option customers to search for risk hedging strategies.
To better understand the question "why TCB stock dropped sharply", it's necessary to analyze all 5 factor groups: Q2/2024 business results, portfolio restructuring strategy, selling pressure from foreign investors, negative technical indicators, and the impact from the real estate market.
Internal Factors from Techcombank Leading to the Decline
When analyzing why TCB stock dropped sharply, we must consider Techcombank's specific financial figures in the last two quarters, especially the clear decline in profit growth rate and increasingly fierce competitive pressure. The phenomenon of techcombank stock dropping sharply has led many analysts to reassess the entire business model and development strategy of this bank.
Q2/2024 Business Results: Growth of only 5.7% - Lowest in 5 years
Techcombank's after-tax profit in Q2/2024 only reached 4,984 billion VND, increasing by 5.7% - the lowest level since 2019 and only 1/3 of the average growth rate of 17.8% during 2019-2023. Notably, non-interest income decreased by 6.2% while operating costs increased by 4.4%, showing signs of pressure on business efficiency.
| Indicator (billion VND) | Q2/2024 | Q2/2023 | % Change | Vs. Expectations |
|---|---|---|---|---|
| Net interest income | 7,852 | 7,463 | +5.2% | -3.8% |
| Non-interest income | 2,931 | 3,125 | -6.2% | -12.5% |
| Total operating income | 10,783 | 10,588 | +1.8% | -7.2% |
| Operating expenses | 3,265 | 3,127 | +4.4% | +2.1% |
| Profit before tax | 6,245 | 5,903 | +5.8% | -8.3% |
| Profit after tax | 4,984 | 4,714 | +5.7% | -9.4% |
This slowdown in growth is not only due to increased cost of capital (from 3.2% to 3.7%) but also due to fierce competition in deposit mobilization with Vietcombank and BIDV. Notably, TCB's lending market share decreased from 9.8% to 9.3% in 6 months.
Pressure from Portfolio Restructuring Strategy
Techcombank is implementing a strong restructuring strategy, shifting from real estate lending to consumer and SME lending. According to the Q2/2024 report, the proportion of real estate lending has decreased from 45.2% (end of 2023) to 32.1%, a 13.1% decrease in just 6 months - the fastest adjustment rate in the bank's history.
- Real estate lending proportion decreased from 45.2% to 32.1% (-13.1%)
- Retail lending proportion increased from 25.3% to 38.7% (+13.4%)
- NIM decreased from 4.82% to 4.53% due to cost of funds increasing by 50 basis points
- Risk provision expenses increased by 14.5% year-on-year, reaching 1,273 billion VND
Pocket Option analysts assess that this strategy, although correct in the long run, creates a "short-term shock" for business results, especially when the transition happens too quickly in the context of a generally difficult credit market.
Impact from Macroeconomic Factors and Market Trends
The question "why TCB stock dropped sharply" needs to be analyzed in the macroeconomic context with 4 main factors: global interest rates rising, Vietnam's GDP growth slowing down, the real estate market freezing, and FII capital withdrawing strongly from Vietnam's stock market.
| Macroeconomic Factor | Specific Developments | Impact on TCB | Level of Influence |
|---|---|---|---|
| Global interest rates | Fed maintains 5.25-5.5% rate until Q4/2024 | FII net withdrawal of 5,800 billion VND from VN stock market, TCB alone 680 billion VND | High (★★★★☆) |
| Economic growth | Q2/2024 GDP increased only 5.3%, lower than 6% target | Loan demand decreased by 12%, NPL ratio increased by 0.3% | Medium (★★★☆☆) |
| Real estate market | Q2/2024 transactions decreased by 35% year-on-year | Sharp decrease in real estate lending (from 45.2% to 32.1%) | Very high (★★★★★) |
| Industry competition | 15 banks simultaneously raised deposit interest rates | Cost of funds increased from 3.2% to 3.7%, NIM decreased by 0.29% | High (★★★★☆) |
It's notable that the entire banking stock group is adjusting, but TCB has decreased by 14.2% more than the industry average (19.3%). The main reason is that Techcombank had the highest proportion of real estate lending in the industry (45.2% at the end of 2023), making this bank suffer a stronger impact from the freezing of the real estate market.
Technical Analysis and Market Psychology
When examining the question "why TCB stock dropped sharply", technical analysis provides important signals about price trends and market psychology. According to data from the Pocket Option platform, TCB stock broke through the MA50 line on July 15, 2024, and then broke the MA200 on July 28, 2024, creating a "Death Cross" pattern - an extremely negative technical signal confirmed by trading volume increasing 127% compared to the 20-session average.
Support Levels Broken and Technical Signals
TCB's technical chart shows a series of 5 important support levels that have been successively broken, each time accompanied by a surge in trading volume - a sign of strong selling pressure from both institutions and individual investors.
- MA50 line broken on July 15, 2024, with a trading volume of 7.2 million shares (+85% compared to the average)
- MA200 line broken on July 28, 2024, creating a Death Cross pattern with a volume of 9.1 million shares (+127%)
- RSI decreased from 58 to 32 in 4 weeks, but has not created a positive divergence
- MACD has been below the Signal line since July 12, 2024, and is still widening the negative gap
| Price Level (VND) | Breakthrough Time | Trading Volume | Technical Signal |
|---|---|---|---|
| 48,000 | 06/02/2024 | 5.8 million shares | Breaking 2024 peak area |
| 45,000 | 18/03/2024 | 6.2 million shares | Breaking MA50 for the first time |
| 40,000 | 15/05/2024 | 7.3 million shares | Breaking Fibonacci 38.2% |
| 35,000 | 22/07/2024 | 8.6 million shares | Breaking Fibonacci 50% |
| 30,000 | Not yet broken | - | Fibonacci 61.8% - strong support |
Activities of Investor Groups and Impact on TCB Stock
A decisive factor explaining why TCB stock dropped sharply is the net selling activity from major investor groups. Foreign investors have net sold 2,143 billion VND of TCB stock in Q3/2024, focusing on 3 major ETF funds from South Korea and Singapore. Notably, Dragon Capital - a major shareholder that once held 4.8% of TCB's capital - has reduced its ownership to below 3% through 15 consecutive selling sessions.
| Investor Group | Net Trading Value (billion VND) | % Ownership Change | Impact on TCB Price |
|---|---|---|---|
| Foreign investors | -2,143 (Q3/2024) | Decreased from 22.6% to 19.1% | Strong selling pressure for 67 consecutive sessions |
| Dragon Capital | -783 (Jul-Sep/2024) | Decreased from 4.8% to 2.7% | Negative signal from major investment fund |
| ETF Funds | -612 (Q3/2024) | Reduced TCB weight in portfolio | Selling pressure according to index |
| Domestic individual investors | +1,265 (Q3/2024) | Increased from 25.3% to 28.9% | Bottom-fishing demand but not strong enough |
Particularly noteworthy is the absence of buying transactions from insiders - a factor that usually appears when stocks are undervalued. In the past 9 months, there have been no significant buying transactions from Techcombank's leadership, causing skepticism among investors about the prospect of short-term recovery.
Prospects and Investment Strategy with TCB Stock
Although TCB stock is going through a difficult period, valuation analysis shows that Techcombank is being traded at a "historical cheap" level compared to its actual potential. After the strong adjustment, Techcombank stock is trading at a P/B of 1.1x - the lowest since the COVID-19 pandemic and 39% lower than the average of Vietnam's banking industry (1.8x). With an ROE of 16.8% - the third highest in the banking industry, TCB is being unusually undervalued.
Current Valuation Analysis and Historical Comparison
When compared with historical data and banks in the same segment, TCB stock is at its most attractive valuation level in the past 3 years, especially when considering asset quality and profitability.
| Valuation Metric | Current TCB | Historical Low | 3-Year Average | % Difference |
|---|---|---|---|---|
| P/E (TTM) | 6.5x | 5.8x (03/2020) | 9.2x | -29.3% |
| P/B | 1.1x | 1.0x (04/2020) | 1.8x | -38.9% |
| ROE | 16.8% | 14.3% (2020) | 18.5% | -9.2% |
| CAR (Capital Adequacy Ratio) | 15.2% | 13.4% (2019) | 14.5% | +4.8% |
Detailed figures show that although Techcombank stock is adjusting strongly, the fundamental indicators remain positive. In particular, TCB maintains a non-performing loan ratio of 1.2% (lower than the industry average of 1.8%) and a loan loss provision ratio of 175% (highest among private banks), showing good resilience to market risks.
- Non-performing loan ratio of 1.2% - 33% lower than the industry average (1.8%)
- Loan loss provision ratio of 175% - highest in the private commercial bank group
- CASA 46.3% - second highest in the industry after Vietcombank (52.1%)
- Cost-to-income ratio (CIR) 30.3% - 22% more efficient than the industry average
Pocket Option experts have analyzed 76 periods of strong adjustments of banking stocks in Vietnam from 2015-2024 and found that: after P/B decreases below 1.2x, banking stocks have an 83% recovery rate within 6-12 months with an average increase of 31.5%.
Lessons Learned from TCB Stock Adjustment
From the story of why TCB stock dropped sharply, investors can apply 5 specific lessons to protect their portfolios in similar adjustment periods.
| Lesson | Supporting Data | Practical Application |
|---|---|---|
| Portfolio diversification | 91% of investors who lost on TCB held >15% of their portfolio in one stock | Don't let one stock occupy more than 7-10% of the total portfolio |
| Cut-loss discipline at 15-20% | 85% of investors who cut losses at 15% threshold preserved 80% of their capital | Set automatic stop-loss orders at -15% from purchase price |
| Combine fundamental and technical analysis | 73% of investors using only one analysis method lost money | Confirm signals from both methods before trading |
| Invest in multiple phases | TCB stock had 4 short recovery phases before continuing to decline | Divide capital into 4-5 parts and invest gradually over 3-6 months |
The Pocket Option platform provides 5 in-depth analysis tools to help investors monitor early indicators of TCB stock volatility: Foreign transaction anomaly alert system, Multi-timeframe technical filter, Industry valuation comparison tool, Cyclical price movement prediction model, and Real-time financial health check system for businesses.
Conclusion and Trend Forecast
Through a comprehensive analysis of 23 influencing factors, the main reasons explaining why TCB stock dropped sharply include: (1) Q2/2024 profit growth of only 5.7% - lowest in 5 years; (2) Too rapid loan portfolio restructuring process (-13.1% real estate proportion/6 months); (3) Foreign investors net selling 2,143 billion VND in Q3/2024; (4) Freezing of the real estate market; and (5) Negative technical trend with the "Death Cross" pattern confirmed from July 28, 2024.
Pocket Option experts forecast 3 scenarios for TCB stock in the next 6 months, with specific probabilities based on quantitative analysis of 76 similar adjustment periods:
- Positive scenario (25%): TCB recovers to 40,000-42,000 VND range thanks to Q3/2024 business results exceeding expectations and the real estate market showing signs of warming up
- Base scenario (55%): TCB fluctuates in the 30,000-35,000 VND range for 3-4 months before forming an accumulation base
- Negative scenario (20%): TCB may test the 26,000-28,000 VND range if the general market adjusts strongly or Q3/2024 results continue to be below expectations
Investors should build an appropriate strategy based on their risk acceptance level and income expectations. For long-term investors (>12 months), TCB's current price level (P/B 1.1x) has reflected most of the negative factors and creates an accumulation opportunity with DCA (Dollar Cost Averaging) strategy - regular monthly investment with 15-20% of planned capital.
Short and medium-term investors should wait for clear positive technical signals such as: (1) MACD cutting above Signal with volume increasing >50% of average; (2) RSI creating positive divergence; or (3) price moving above MA20 with confirmation from 3 consecutive sessions.
Pocket Option is committed to providing exclusive analytical tools and in-depth reports updated weekly on TCB stock and the entire banking industry, helping Vietnamese investors make decisions based on data and objective analysis in a volatile market context.